Subprime executives, back in the mortgage business

6:01 pm, September 3, 2013Updated: 12:51 pm, May 19, 2014

In 2009, the Center for Public Integrity published a list of the top 25 subprime lenders from 2005 through 2007 — the peak of the real estate boom — whose bad loans led to the near collapse of the economy. We found senior executives from all 25 lenders are back in the mortgage business, including a dozen former CEOs and founders of subprime lenders.

Countrywide Home Loans

Stanford L. Kurland

Stanford L. Kurland was the No. 2 executive at the nation’s top subprime lender, working at Countrywide from 1979 to 2006 . Today he is founder, chairman and CEO of PennyMac, an investment firm and real estate investment trust that he founded with other Countrywide alumni. Like Countrywide and other pre-crisis mortgage giants, PennyMac is set up to profit at every stage of the home-finance chain: Lending, bundling mortgages into bonds, reselling and investing in the bonds and collecting payments. See full lender profile

Ameriquest Mortgage Co./ACC Capital Holdings Corp.

Paul Lyons

Paul Lyons was director of whole loan sales for Ameriquest and its owner, ACC Capital Holdings. In 2006, Ameriquest was one of the first in the subprime industry to show signs of collapse. Today, he is COO of CS Financial, which advertises loans with down payments as low as 3.5 percent and does not always require borrowers’ tax returns or income documentation. See full lender profile

New Century Financial Corp.

Carl W. Vernon

Carl W. Vernon was president of the retail division for New Century and is now chief operating officer of Nations Direct Mortgage LLC in Irvine, Calif., the “official sponsor of prosperity” according to the company’s marketing materials. See full lender profile

First Franklin Corp./National City Corp./Merrill Lynch & Co.

L. Andrew Pollock

L. Andrew Pollock was president and CEO of First Franklin and is now co-CEO of Rushmore Loan Management Services, which collects payments and is ramping up its lending operations. He told Congress in 2007 that First Franklin’s underwriting standards “assure the quality” of its loans. They defaulted at rates that were high even for the subprime industry. See full lender profile

Long Beach Mortgage Co./Washington Mutual

David Schneider

Until February, David Schneider was co-CEO of Caliber Home Loans, owned by Lone Star Funds. During the boom, he was president of home loans at Washington Mutual Inc., the biggest failed bank, and ran its subprime lending subsidiary Long Beach Mortgage.

In 2011, Schneider agreed to pay $50,000 to settle civil fraud charges that he negligently caused Washington Mutual to take “extreme and historically unprecedented risks” that caused billions in losses and the nation’s biggest bank failure.

The payment is unlikely to dent his net worth. Schneider was paid more than $5.9 million for his three years running Washington Mutual’s home loans division ; received $3.7 million for the stately, Seattle-area home that he sold the year before his settlement; and is trying to claim $390,000 from a retirement account currently tied up in Washington Mutual’s bankruptcy. He owns a mountain home worth $1.2 million in Park City, Utah, through a family trust.

In fact, the civil penalty is only $5,000 more than Schneider’s profit from flipping the Dallas house he purchased when he joined Caliber’s predecessor company in 2012. This May, after leaving Caliber, Schneider sold the home to David Slear, the ninth executive on this list, for $768,000. Slear had run HSBC’s foreclosure division. Schneider hired Slear to do the same work for Caliber. The house was appraised at far more: $957,230. See full lender profile

Option One Mortgage Corp./H&R Block Inc.

Brad Dubrish

Brad Dubrish was CEO and founder of Option One, the subprime lending arm of tax preparation company H&R Block Inc. Dubrish, a former college football player, now heads up wholesale lending for New Penn Financial, a fast-growing lender whose loans aim “to fill critical service gaps in the market, offering products for investors, foreign nationals, those with minor credit blemishes.” See full lender profile

Fremont Investment & Loan/Fremont General Corp.

Dave Gordon

Dave Gordon was senior vice president for loan servicing at Fremont and has moved on to Carrington Holding Co. where he is chief operating officer. Carrington’s subsidiaries lend to people with FICO scores as low as 580 and offer a range of other real estate and investment related services. See full lender profile

Wells Fargo Financial/Wells Fargo & Co.

John Robbins

John Robbins founded three mortgage companies — two before the crisis and one more recently. Until 2007, he was chairman and CEO of American Mortgage Network, which was sold to Wachovia Bank. Wachovia nearly collapsed under the weight of bad loans made by AmNet and others and was rescued by Wells Fargo. Robbins founded his third company, Bexil American Mortgage, in 2011 and recently stepped down as president and CEO. See full lender profile

HSBC Finance Corp./HSBC Holdings plc

David Slear

David Slear was director and senior vice president for default services with HSBC and is now senior vice president for default servicing with Caliber Home Loans Inc. See full lender profile

WMC Mortgage Corp./General Electric Co.

Amy Brandt

Amy Brandt was president and CEO of WMC and one of the youngest subprime executives on the list. After the crisis, she started a record label. Today, she is chief operating officer of Prospect Mortgage LLC, which is run by a former executive of IndyMac and American Home Mortgage and chaired by a former CEO of Fannie Mae. See full lender profile

BNC Mortgage Inc./Lehman Brothers

James Harrington

James Harrington was senior vice president with Lehman overseeing the company’s lender relationships, including with BNC, a subprime lender that Lehman bought . Today is he is managing director for investor relations with Resurgent Mortgage Servicing, which specializes in servicing HLTF (high loan to value) loans, as well as “scratch & dent performing and non-performing loans.” See full lender profile

Chase Home Finance/JPMorgan Chase & Co.

Ramesh Lakshminarayanan

Ramesh Lakshminarayanan was chief risk officer of with Chase Home Lending and head of capital market operations for mortgage banking at Chase. He is now executive vice president and chief risk officer of Nationstar Mortgage, located near Dallas. See full lender profile

Accredited Home Lenders Inc./Lone Star Funds V

Jim Konrath

Jim Konrath was chairman and CEO of Accredited and is now chairman of LendSure Financial Services, a “fresh face” to the mortgage industry but with experience that is “decades deep,” the company says. See full lender profile

IndyMac Bancorp, Inc.

Scott Van Dellen

Scott Van Dellen was CEO of the homebuilder division of IndyMac , the costliest bank failure of the financial crisis. In December, a jury upheld charges that he two others had negligently approved risky loans after they knew the bubble had burst. (Insurers are likely to cover much of the $169 million fine, which is still subject to appeal.) Today, Van Dellen is president of Yale Street Mortgage, which lends to real estate investors who want to “buy, fix and flip” homes and apartment buildings. See full lender profile

CitiFinancial / Citigroup Inc.

Brian Witham

Brian Witham was in charge of centralized servicing centers in the U.S. and Canada with CitiFinancial, Citigroup’s subprime lender , and is now CEO of PMAC Lending Services Inc. See full lender profile

EquiFirst Corp./Regions Financial Corp./Barclays Bank plc

Jeffrey Tennyson

Jeffrey Tennyson was chairman and CEO of Equifirst and is now head of B2R, which stands for “buy to rent,” Bloomberg reported this summer. The company is owned by Blackstone Group LP, the nation’s largest private equity firm, which has bought 30,000 distressed homes to put on the currently lucrative rental market. A Blackstone spokesman declined to comment on or dispute the news report. See full lender profile

Encore Credit Corp./ECC Capital Corp./Bear Stearns Cos. Inc.

Anthony Villani

Anthony Villani made a lateral move: He went from executive vice president and general counsel of EMC Mortgage, which was owned by Bear Stearns and fed its mortgage securities pipeline; to executive vice president and general counsel with Nationstar Mortgage, among the fastest growing mortgage servicers. Nationstar is expanding its lending operations. See full lender profile

American General Finance Inc./American International Group Inc. (AIG)

Jerry Schiano

Jerry Schiano was CEO of Wilmington Finance, a subprime lender that he sold to the bailed-out insurance giant American International Group. Wilmington later settled charges of discriminatory lending that allegedly occurred while he was in charge. Schiano is CEO of New Penn Financial, which he formed with former Wilmington colleagues. New Penn was acquired in 2011 by Shellpoint, a mortgage bundler owned in part by Lewis Ranieri, who helped invent modern mortgage finance. See full lender profile

Wachovia Corp.

Winston Wilkinson

Winston Wilkinson was executive vice president of retail banking with Wachovia and is now an executive vice president with Ditech, according to his LinkedIn profile. Ditech is a direct lender that was owned by GMAC and purchased out of bankruptcy by Walter Investment Management Corp. Walter says it offers “solutions to owners of less-than-prime, non-conforming and other credit-challenged mortgage assets.” See full lender profile

GMAC LLC/Cerberus Capital Management

Kevin Brungardt

Kevin Brungardt was a managing director in GMAC’s office that handled borrowers falling behind on their loans, his LinkedIn profile says. He was chairman of Roundpoint Financial, a lender, and is a managing director of its holding company, Tavistock Group. See full lender profile

NovaStar Financial Inc.

Scott F. Hartman

When NovaStar failed, some of its executives founded Credentia Group LLC. NovaStar retained them at $45,000/month to help wind down the company. Scott F. Hartman was founder of NovaStar and is co-founder of Credentia , which invests in mortgage bonds. See full lender profile

American Home Mortgage Investment Corp.

Lisa Schreiber

Lisa Schreiber was executive vice president of American Brokers Conduit, the wholesale division of American Home Mortgage. She was named vice president of correspondent lending with New Penn Financial in February. See full lender profile

GreenPoint Mortgage Funding Inc./Capital One Financial Corp.

Steve Abreu

Steve Abreu was president and CEO of GreenPoint Mortgage and is now head of mortgage originations with Ellington Management Group. Ellington is an investment company that manages a portfolio of residential, mortgage-backed securities and invests in other real estate-related assets. Abreu was hired to launch a new lending operation. See full lender profile

Aegis Mortgage Corp./Cerberus Capital Management

Rick Thompson

Rick Thompson was chairman and CEO of Aegis and is now president of Envoy Mortgage Ltd., a lender with “aggressive growth plans under way” that would have the company lending in all 50 states. See full lender profile